The PER is a tax envelope for investing, the form of which is similar to that of life insurance: it allows you to invest in euro funds and in units of account. But his tax advantages are different : payments are deductible from your taxable income up to 10% of your professional income, which reduces your tax bill immediately. In return, the money is blocked until retirement, except in special cases (purchase of the main residence, life accident, etc.).
The Retirement Savings Plan allows two types of output : in capital (you recover everything at once) or in life annuity (you receive a fixed sum each month until your death). A life annuity provides the security of a regular payment for life. “The advantage of annuity is that it allows you to generate recurring, regular and stable income. If we really need additional remuneration, it is rather suitable”estimates Benjamin Pedrini, co-founder and general manager of Epsor. But in return, you abandon your capital to the insurer: if you die early, you lose; if you live long, you win.
How much capital is needed to receive 1,000 euros of pension per month?
The amount of the pension depends on two things: the accumulated capital on the PER and the conversion rate applied by the insurer at the time of liquidation. This rate is calculated from actuarial tables, that is to say your statistical life expectancy at the starting age. The later you leave, the more favorable the rate, because the insurer pays for less time. “There is no universal formula, it depends on the insurers, the accumulated savings, the age at which you ask to transform your capital into a life annuity. Insurers use mortality tables to consider the duration of the annuity »specifies Benjamin Pedrini.
These tables therefore vary from one insurer to another, and the arrears fees (between 1 and 3%) further reduce the final annuity. The best thing to do is to request these conversion tables at the time of subscription, if the life annuity is the reason for which you are opening a PER.
For an annuity of 1,000 euros gross per month (12,000 euros per year), here is the average order of magnitude of capital to have in your PER according to your starting age
- Departure at age 62 (if we take a conversion rate of 3.6% to 3.2%): it is necessary between 333,000 and 375,000 euros
- Departure at age 65 (conversion rate of 3.5% to 4%): it is necessary between 300,000 and 343,000 euros
- Departure at age 67 (conversion rate of 3.8% to 4.3%): it is necessary between 279,000 and 316,000 euros
Benjamin Pedrini gives a simplified order of magnitude: “It is said that to obtain 1,000 euros of additional income per month from a life annuity, you must have accumulated around 300,000 euros of capital. » But this figure is valid for liquidation around age 64-65. “If you apply for the pension at age 50 with 300,000 euros, it will be well below 1,000 euros. If you ask for it at 70, it will be much higher. »
How much to save to get there?
The advantage of the PER is the tax effect upon entry: your payments are deductible from your taxable incomewithin the limit of 10% of your professional income. Concretely, if you are taxed at 30%, each 100 euros paid only costs you 70. This mechanically accelerates the accumulation of capital.
To reach 320,000 euros (mid-range) with an average return of 5% per year:
- Starting 15 years before retirement: you will need to invest around 1,200 euros per month
- Starting 20 years before: around 780 euros per month
- Starting 25 years before: around 540 euros per month
The earlier you start, the lower the savings effort, because the compound interest will do the rest. To achieve the 5% return, it is advisable to invest all of your payments in units of account (or almost) when the investment horizon is greater than 10 years to maximize gains. Then, when retirement approaches, you can gradually switch to more secure investments (euro funds, bonds, etc.).
Be careful, however: for it to work, you must not open your PER anywhere. An information report from the National Assembly in September 2024 recalled that the costs PERs remain a real threat to performance: certain banking contracts display up to 5% fees on payments, and annual management fees of 2% or more. Over 30 years, a difference in fees of 1.5% can cost you tens of thousands of euros in final capital. There golden rule : favor an online PER with no fees on payments and with management fees of less than 1% per year.
What you will actually touch
The 1,000 euros pension is not net of taxes and social security contributions. If your payments have been deducted upon entry (which is the most common case), the annuity is taxed like a retirement pension : 10% reduction, then income tax according to your bracket, plus 18.6% social security contributions applied to the gross amount. But there is a subtlety: a reduction depending on the age you were at the first payment of the pension. The taxable fraction is therefore 70% if you were under 50 years old, 50% if you were between 50 and 59 years old, 40% if you were between 60 and 69 years old and 30% if you were over 69 years old.
Concretely, on 1,000 euros gross monthly for a 65-year-old person, you should receive:
- At the 0% bracket: 926 euros net per month
- At the 11% bracket: 826 euros net
- At the 30% bracket: 656 euros net
If you chose to do not deduct your payments upon entrytaxation is lighter on exit, since you will not pay taxes to avoid double taxation, but still social security contributions with the same reduction depending on age. Using the same example, it remains:
- At the 0% bracket: 926 euros net per month
- At the 11% bracket: 882 euros net
- At the 30% bracket: 806 euros net
These figures are given for information purposes only. Taxation actually varies enormously from one person to another, and it is difficult to anticipate how much tax you will pay at that time (mechanically, income falls, so the TMI should also fall).
